Trump earlier talked about the US hitting back and I’d say that’s likely but a bit less on this. This is a guy who was talking tough every day during the early phase of the war and now there’s a comment like this? That reads as someone looking for a way out of this.

It looks like Iran is trying to establish escalation dominance with the US, or at least escalation parity.

At the moment, the stock market is getting beaten up on a tech reversal but oil has come down and that’s the Iran trade. The Russell 2000 is also down just 0.4%.

Given this it’s tough to take the side of “huge escalation is coming” at the moment but you never know with Trump.

This article was written by Adam Button at investinglive.com.